Facebook ‘Grants’ Devotees a Disappointment

[qi:004] Somewhere in San Jose, Calif., devotees of all things Facebook have gathered to celebrate the cult of Mark Zuckerberg and the little company he started. Dave McClure might call it his Graphing Social Patterns conference, but we all know it’s all about Facebook, Silicon Valley’s Furby. And while the fanboys gather and rejoice, they should also pay heed to some of the red flags fluttering in the hot air.

The company apparently sent out an email earlier this month informing all those who applied for grants via the fbFund to start over. We emailed Facebook to check the authenticity of the email, but had not heard back from them at the time of posting. (Given that there is a Facebook app for the application process, we take that as a confirmation.)

The fbFund was unveiled at the TechCrunch 40 conference last month, and as part of the announcement, Facebook backers Accel Partners and Founders’ Fund earmarked $10 million in new funds to give out to app developers as “grants” of between $25,000 and $250,000 each.

“It has become clear that we will receive proposals which contain similar or even identical ideas. As a result, and in order to protect other developers and us from claims that we or anyone else copied material without the creator’s permission, unless we agree otherwise in writing, we can’t promise that any materials or information you submit here will be kept confidential, or specifically that we or others might not develop similar or identical products or services. To make sure that everyone understands the conditions of submitting a grant application, we will not review any materials you have sent via email, and any materials you may have sent have been deleted.”

However well-meaning their intentions are, if the email is indeed authentic, then let me point out the obvious: the Facebook brain trust didn’t think through the implications of their announcement, and rushed to the podium, literally and figuratively. That deserves an “F,” especially for a startup that promises to be social operating system.

Is this a one-time oversight, or part of a pattern? The latter seems to be the case. Previously, the much hyped start-up botched up the launch of a smart feature (news feed), that caused a ruckus and a short-lived backlash. Luckily they dodged the bullet that time. Similarly, at the launch of the Facebook platform, the company showed its organizational ineptitude, keeping partners on tenterhooks.

Launch partner companies have been struggling to deal with uncertainty and last-minute changes to the tools and services made available by Facebook, multiple sources have told GigaOM.

Remember that when Facebook was subpoenaed a few weeks ago by the New York Attorney General Andrew Cuomo over issues of “safety,” what got the political opportunist riled up was that the company “ignored” complaints from undercover investigators about “inappropriate sexual advances to underage users.”

The veracity of the charges is up for debate, as commentators in response to my previous post let me know, but regardless: you don’t just ignore complaints from an AG. It was a huge tactical blunder. Add in the fbFund fracas – you can feel that something is not right here.

These repeated botch-ups are signs that the wheels on Facebook, arguably one of the fastest growing startups in Silicon Valley are starting to wobble. Or maybe the autocratic Zuckerburg is a cat with nine lives.

Two Facebook-related blog posts I recommend:

* Anil Dash: Blackbird, Rainman, Facebook and The Watery Web

* Kara Swisher: Facebook Apps are for toddlers.